NEWS & OPINION
31 March 2020
Why it’s tough out there for advisers – and their clients MoneyMarketing recently spoke to Jeanette Marais, deputy CEO of Momentum Metropolitan Holdings, on the side lines of the Johannesburg leg of Momentum’s Independent Financial Adviser Partnership Roadshow.
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eanette Marais says that while it may be tough in returns, not beating inflation, and the client is out there for advisers, this means it’s tough for drawing an income – probably a bit more than he/ clients too. “That’s why the roadshows that we’re she should. This means trouble for their future having at the moment are important to further financial wellbeing.” strengthen the relationship with advisers. Advisers Marais says two trends have arisen. “The first is can play a massive role in clients’ lives – they can the strong outflow of money onto offshore platforms. make sure that clients’ trusts, wills, life insurance and Our Momentum Wealth International platform is investments are in place and this, in the long run, experiencing unprecedented flows, as many clients creates value and wealth.” Advisers play a key role are investing as much money as they can into as financial coaches, helping clients see through the offshore jurisdictions like Guernsey.” short-term noise and understanding their long-term In addition, given the recent poor local market investment goals – as well as stopping clients from returns, there is a flight to safety with fixed income overreacting to short-term news, switching and and traditional life annuities now back in favour. destroying value by missing the opportunity when “Conservative products with investment guarantees markets recover. – where we guarantee your capital and a certain She describes the different types of financial return – are flying off the shelves.” advisers. Some advisers specialise in investments, Marais says that people were told they had to be and they only step in when clients have already in retirement annuities and pension funds because built up an investment portfolio, for instance at of tax savings. “Prescribed assets would be an awful retirement. “This Roadshow is to reach our ‘fullblow for hardworking people who have saved. service financial advisers’; that’s independent Retirement saving is a long-term plan. All this shortadvisers who provide holistic term uncertainty around the security of financial advice with shortyour investments means that people will term and long-term goals THE ROADSHOWS not save appropriately for a comfortable – in other words, a portfolio retirement.” THAT WE’RE approach. The audience at this She adds, “We do not feel we need to HAVING AT THE Momentum roadshow look have prescription to ensure we invest after everything, walking the responsibly and in support of our MOMENT ARE road with their clients and society. We have many examples of great IMPORTANT playing a big role in clients’ investment-yielding projects where a TO FURTHER lives in terms of their future.” social good was also delivered. If you Interacting with financial STRENGTHEN THE look at our group’s assets today – and advisers during these by that I mean the group’s policyholder RELATIONSHIP roadshows has once again funds and shareholder funds – we have confirmed their concerns, WITH ADVISERS voluntarily invested massively into which start with a shrinking buying certain bonds to support selected client base, says Marais. “More and more advisers’ struggling parastatals, in building emerging black clients are emigrating as it’s often people with businesses and delivering clean energy, without financial means that get global opportunities,” she being asked to do so. says. “Are local advisers well positioned to advise “The other concern is that with the voluntary someone who has moved out of South Africa and investment in the parastatals, as asset managers now lives in Australia or the UK?” we have been able to place significant pressure to Secondly, Marais says, clients in SA are concerned improve governance. This is not the case if there is about political developments in the country, compulsory support of these entities.” frequently asking themselves if there’s a future and She believes that for the greater good of the how things will play out. “We are anxious that we country, Eskom shouldn’t be allowed to fail, but says won’t turn the corner,” she says. People are concerned there should be proper governance to ensure its about many populist proposals that may require big future success. spending from government, which simply does not “We also recognise that support of some critical have the money. “This means that people are restless state entities is essential for the economy. The private and worried about having their money invested. sector, as investors, has a strong role in supporting “In the past, what counted for us was that the management and ensuring good stewardship of country was one of the top return jurisdictions in the these corporations.” world with a great market – the JSE provided stellar Momentum has a committed approach to returns, even though the economy was not growing partnering with advisers in terms of their that much.” ongoing education through roadshows and But the past few years have seen a tough, lowCPD workshops. “Since the conflict of interest return environment and everyone is affected by legislation came about ten years ago, we as an the markets. “On top of that, advisers have clients industry had to think long and hard about how who – like most South Africans – haven’t really not to lose that connection with the advisers saved enough for retirement. These clients have and how to professionalise our relationship,” retirement products that provide only 2% to 3% says Marais. “I’d be the first to acknowledge
that, maybe 30 years ago, the industry was far more informal, but today it’s about how much value can be added.” That is also why she firmly believes that roboadvisers can never replace human advisers. While it was expected that robo-advice would take over the financial services industry and usurp the role of human advisers, the opposite happened. “I think a lack of brand awareness and a lack of trust in robo-advisers are big issues. Many advisers in SA have websites where clients can answer a few questions around their money. Clients will go through the process until they have to make a choice – and that’s when they want human contact. This has been proven to be the trend around the world.” The human touch and personal assurance that the investment plan is fit for purpose will remain essential to any investment process. Robo-advice can make an adviser’s life easier in terms of saving time by streamlining the advice process. “We find that a lot of advisers still want to fill out lengthy paper forms instead of sitting in front of their clients with a computer screen. Some advisers haven’t transformed and there’s a lot of work we need to do. Technology can lead to lower costs for both the adviser and us – it’s something we need to partner on. We would like to empower our advisers to spend more time with their clients and less time completing paperwork.”
Jeanette Marais, Deputy CEO, Momentum Metropolitan Holdings
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